The stock has done well recently with around 25% appreciation. This is better than the performance over the longer term, when the stock has remained extremely volatile with negative returns (-25%)over the last 5 years. The fundamental performance has been better recently as the net margins have improved. However, the company is still reporting losses on a net basis. Over the last few years, the revenue growth has been exponential, but the company has mostly reported net losses. In 2009, the revenues were $150 million, while in 2012 they were around $650 million. However, the accumulated deficit is around $162 million, which indicates the bottom-line performance. The stock price has remained under pressure partly because of the consistent losses. However, the recent improvements may change the sentiments if the company is able report a few more good quarters. The stock is now trading at 0.46 times sales, and the cash position is good. The long term debt has reduced to around $86 million as on June 30, compared to $197 million at the end of Q1'13. In H1'13 the losses reduced to $6.4 million including preference dividend of $1.08 million and a one time charge of $3.8 million for extinguishment of debt. Importantly, the company is backed by Dr. Phillip Frost, who has done well with several of his investments in the pharma / medical devices sector. Companies like OPKO Health (OPK) and Biozone (BZNE) have done well recently. Ladenburg has the potential to do well, and has not run up much recently. So if it come closer to turnaround, the market will begin to factor that and the stock may do much better. Like all such stories, there is always a risk of slippages, but the rewards are likely to be in proportion. One can play along with a clear exit strategy in mind in case things go bad.
